Kathleen Sebelius gets ahead of CLASS debate

HHS Secretary Kathleen Sebelius got out in front of critics who say the CLASS act can’t work, addressing key questions about the long-term care program created by the ACA.

Sebelius signalled the direction HHS would take in making the Community Living and Support Services Program financially viable. Her remarks at a Monday morning event at the Kaiser Family Foundation amounted to a defense of the provision that Republicans have targeted for repeal.

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She started out by shooting down criticism that has its roots in President Obama’s deficit commission. The commission called it an unsustainable entitlement that would end up costing tax payers money. Not so, Sebelius countered, the law says CLASS benefits must be paid for by premiums, not with tax dollars.

“This is non-negotiable and a starting point for every conversation about flexibility [for designing the program] that we have,” she said.

As a former insurance commissioner, she said she was sensitive to the solvency problems the program presents and the need to attract as broad-based a pool of enrollees as possible. Private insurers solve these problems with underwriting, an option that the statute forbids to HHS. The first step, she said, would be to “work aggressively to make sure a wide range of people know about the new option and how much they may need to rely on it in the future.”

But education to boost enrollment will not be enough. One option she said is the focus of discussions at HHS is adjusting the work and income requirements for eligibility so that enough money is coming in to cover premiums going out.

“We know that if the standard is set too low, we may have too many enrollees who will quickly claim benefits … and that was not intent of the program,” she said.

Additionally, she noted that the law did not provide for premiums to increase with inflation even as benefits rise. Rather than set unreasonably high premiums at the outset or create a situation in which premiums would quickly be “eclipsed” by growing costs, HHS was “looking at options for indexing premiums so they would rise along with benefits.”

She also pointed to the need to close loopholes in the legislative language that would allow people to skip paying premiums and then re-enroll to receive benefits.

Many of the changes Sebelius hopes to make through the regulatory process, she explained, were modifications the CLASS Act’s congressional architects had intended to put in when the ACA went to conference. But because of the unconventional process by which the bill became law, they never got the chance.

“The president and I have also realized that the CLASS statute …was far from perfect. Many of the changes that would have improved financial stability were not included in final legislation.” But she argued that the law offered a great deal of discretion to make those adjustments through the rulemaking process.

The administration is sensitive to the budgetary implications of the CLASS program for political reasons, not just policy ones. A Senate GOP aide told POLITICO that the CLASS Act is high on the list of repeal targets because it was something that could “get Democrats crosswise on the deficit in the next [electoral] cycle.”

The Class Act, otherwise known as the Community Living Assistance Services and Support Act, is the federal government’s first long term care insurance program.

Under reported and the under the radar of most lawmakers, the program will allow workers to have an average of roughly $150 or $240 a month, based on age and salary, automatically deducted from their paycheck to save for long term care.

This creates a whole new bureaucracy

In the early years there will be money in it, but at the end of the day there won’t be enough money to cover the problems because there will be too many people in the program.

The CBO analysis of the bill, “the program will add to future federal budget deficits in a large and growing fashion.”

Under reported and the under the radar of most lawmakers, the program will allow workers to have an average of roughly $150 or $240..... a month,..... based on age and salary, automatically deducted from their paycheck to save for long term care.

This creates a whole new bureaucracy and with the baby boomers there will be fewer to pay into the system

What 25-30 year old is going to have $200 dollars a month taken from their wages only to maybe NOT have the money for them?

What happens if the person dies before needing it?.......Is it transpayable back to family?

The CBO analysis of the bill, “the program will add to future federal budget deficits in a large and growing fashion.”

Its a wonderful program for people who have had an organ transplant, are in a wheelchair, are starting to suffer from dementia, or are otherwise disabled to some degree. That is because there is no underwriting, anyone who wants coverage gets it, no questions asked.

So, who will sign up? The above referenced people who will soon be on claim. Self sustaining? What is she smoking. There is no possible way it can be self sustaining. The one intelligent comment she made was about getting public knowledge out about LTC. Once the public realizes it isn't all free from the government (too many baby boomers) they will decide to buy "real" LTC insurance and the problem will be solved - for those still healthy enough to get it. It will be cheaper, and better, but if you waited til your health precludes buying it, too sad, too late, you get a welfare nursing home.

Its a wonderful program for people who have had an organ transplant, are in a wheelchair, are starting to suffer from dementia, or are otherwise disabled to some degree. That is because there is no underwriting, anyone who wants coverage gets it, no questions asked.

So, who will sign up? The above referenced people who will soon be on claim. Self sustaining? What is she smoking. There is no possible way it can be self sustaining. The one intelligent comment she made was about getting public knowledge out about LTC. Once the public realizes it isn't all free from the government (too many baby boomers) they will decide to buy "real" LTC insurance and the problem will be solved - for those still healthy enough to get it. It will be cheaper, and better, but if you waited til your health precludes buying it, too sad, too late, you get a welfare nursing home.